The Coronado Global Resources Inc (ASX: CRN) share price has been on fire in June.
Shares in the S&P/ASX 300 Index (ASX: XKO) coal stock closed on Friday trading for 18.5 cents apiece.
After taking a breather for the King's Birthday ASX holiday on Monday, shares surged to 22.5 cents apiece in Tuesday morning trade.
Five trading days ago, on 2 June, those same shares closed the day swapping hands for 10.5 cents each. This sees the Coronado Global share price up a blistering 114.3% in just one week.
Investors who bought at last Monday's closing price, and sold at the 10.5 cents level, could have turned a $6,000 investment into $12,857.
Indeed, shortly after hitting 22.5 cents today, it looks like there's been some serious profit-taking, with almost $11 million worth of shares already having changed hands before the lunch hour.
At the time of writing, shares are trading for 18.0 cents each. While that's now down 2.7% for the day, shares in the ASX 300 coal stock still remain up 71.4% in a week.
Here's why the stock is on a bit of a roller coaster today.
Image source: Getty Images
Coronado Global share price lifts…then falls on confirmed rumours
On Thursday, the Coronado Global share price closed up 13.8% after the miner responded to media speculations, confirming that it was in confidential discussions with Stanwell Corporation.
Stanwell is a government-owned corporation providing electricity supplies to Queensland businesses and residents.
ASX investors piled into the coal stock on the day, despite management warning that the discussions were "ongoing and incomplete".
The company stressed that, "No final agreement has been reached on terms and there is no certainty that a transaction will result and, if a transaction does occur, when or on what terms such a transaction may occur."
Today, however, we have much more clarity.
The big uplift in the Coronado Global share price this morning followed news that the discussions concluded in an agreement that will see Stanwell provide up to US$150 million (AU$230 million) of near-term liquidity to Coronado.
As Coronado's part of the agreement, the ASX 300 miner will supply up to 800,000 tonnes per year of thermal coal over a five-year period commencing in 2027.
The company noted that in addition to its recently announced US$150 million ABL refinancing, the new agreement with Stanwell provides it with up to US$300 million in additional liquidity.
What did management say?
Commenting on the confirmed Stanwell agreement that's sent the Coronado Global share price on a wild ride today, CEO Douglas Thompson, said:
We expect that the additional liquidity, together with the confidence in production delivery and ongoing management actions to reduce cost and capital expenditure, puts Coronado in an improved position to weather the current, prolonged low-price environment and preserve the inherent value of our long-life, high quality metallurgical coal assets.
Noting that at this time "our share price does not reflect the intrinsic value of the company", Thompson added:
We continue to proactively consider all available options to ensure our liquidity position is adequate for a prolonged market downturn and have the appropriate capital structure, including continuing with our disciplined approach to capital expenditure and ongoing cost management initiatives.
Despite the big surge over the past week, the Coronado Global share price remains down 85% since this time last year.
